For subscribers
Does made in Mexico mean made by China?
Donald Trump believes Mexico is a trojan horse for Chinese mercantilism.
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A BYD car dealership in Iztapalapa, Mexico City. US President-elect Donald Trump wants to adjust the United States-Mexico-Canada FTA to ensure that more Chinese vehicles and auto parts will not find their way to the US through Mexico.
PHOTO: BENEDICTE DESRUS/NYTIMES
The Economist
In 2018 United States President Donald Trump started a trade war with China. Mexico benefited; companies seeking to avoid tariffs by diversifying production out of China saw the country as a good option thanks to affordable labour, decent infrastructure and, most importantly, its free-trade agreement with the United States.
As Trump’s second term approaches, that logic is souring. Chinese companies looked to Mexico more than most. Their investment in the country has surged. Trump (who has already threatened to apply a tariff of 25 per cent to Mexican imports “on day one” unless it stops migrants and drugs from illegally crossing the border) believes those firms are using Mexico as a tariff-free gateway to the US. His conviction may end up blowing apart the United States-Mexico-Canada Free Trade Agreement (USMCA).
